A former BRW Rich Lister and IT company director has been found guilty in relation to charges of defrauding the National Australia Bank out of millions of dollars.
The former chief executive of former IT company S Central Group, Peter Mavridis, was found guilty in the County Court of Victoria this week on 33 charges including 23 counts of obtaining financial advantage through deception and 10 counts of providing false accounting, according to the Australian Securities and Investments Commission.
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Mavridis, who will be sentenced next month, made the BRW Rich 200 list back in 2007 for his wealth, which was estimated to be about $74 million at the time.
The guilty verdict follows an investigation by ASIC, which alleged between January and September 2009 Mavridis had directed the company’s financial controller to submit duplicate invoices to NAB, which lead to credit of about $4.8 million being advanced to companies within the group.
ASIC said in a statement S Central Group is no longer operating.
Warfield and Associates chief executive Brett Warfield told SmartCompany the guilty verdict is not surprising and likened the behaviour to an attempt to “pull the wool over the bank’s eyes”
He says because the activity involved a significant amount being defrauded from a financial institution, it was always highly likely a conviction and custodial sentence were to follow.
Warfield said Mavridis’ behaviour had resulted in the “creation of false documents and resulted in banks provided finance based on false documents”.
“He also falsified supporting documents including end of month reconciliations,” he says.
Warfield says false invoicing is one of the most common types of fraud.
“One way that a business can obtain lots of money is by requesting finance from a bank based on assets of the business,” he says.
“This is not an unusual transaction and one that would have occurred in a lot of businesses.”
Warfield says in this case it is noteworthy to see two people working together.
“Two people providing evidence on behalf of company would have given NAB more assurance (everything was OK),” he says.
However, Warfield says some questions remain about the bank’s review process.
“What review and controls did the bank undertake?” he asks.
“What review did it do to be comfortable with the organisation they were lending millions of dollar to?”
SmartCompany contacted NAB and Mavridis but did not receive a response prior to publication.